I am located in Oregon, first time landlord. Our open house is tomorrow and someone has already mentioned they have Section 8 vouchers. My understanding is that it is an opt-in program? But that conflicts with the fact that it is "discriminatory" to tell people that you do not accept Section 8, or to refuse to accept it. I'm so confused. I am not interested in jumping through hoops to get my home "qualified," it would likely delay the move in and therefore impact my income.
Can I still hold the applicants to the same income requirements or am I forced to make accommodations for Section 8? That almost seems discriminatory toward everyone else. Would their voucher count toward income requirements?
Here is a local story, I'm discouraged by it.
@Amanda H., Under the new law, you cannot refuse a Section 8 applicant, but you also do not have to change your criteria specifically for them. As long as you use the same criteria for all applicants, then you are good to go. One thing they do mention is that you cannot "opt-out" of the program just because you don't want to hassle with the paperwork. See the links below for more information.
Discrimination on Source of Funds FAQs
Section 8 Bill
Look there is no doubt there are some section 8 tenants that truly are not gaming the system and need a helping hand.
The system was designed to help people get back on their feet in a time of need for a temporary situation. The problem is a generational legacy of people abusing the system that need to get out and work and become a productive member of society instead of adding to the annual government deficit.
The reality is if you took away food and shelter from a lot of these people they would turn immediately to a life of crime. This is evident in third world countries where people feel a sense of hopelessness and when that goes out the window so does the reality of right and wrong for many people just trying to survive.
I think that is great that one poster has section 8 for 20 years. Based on what I hear from others that Is not a typical section 8 experience across the country. One tenant on section 8 the owner inspection was being conducted. The 17 year old girl comes in and tells her mom she is pregnant. The mom says " No big deal I can tell you where to get everything for free and you don't do anything. " That's the solution to have tons of kids and live off the government. Some investors have a problem perpetuating that kind of thinking in the world.
The whole government system is broken but that is another topic unto itself. Whether we have seen America in greater times to many across the world looking in our average is way better than their best economy, government, etc.
... if you have an income criteria in your standard criteria list such as 3 times the rent in verifiable income... I have yet to see a section 8 tenant that could qualify.
There has been case law where tenants prevailed on the rent multiplier requirement by Sec 8 landlords. The courts found that a Sec 8 tenant's rent used for such a requirement could be only that portion for which they were responsible. So if the total rent was $1200, and the voucher was for $900, the tenant portion was $300. If the requirement was 3 times rent, the tenant was considered qualified if they had $900 in income.
The source of income issue is real, especially here in the West. Get informed everyone.
No question that in some states LAWFUL source of income cannot be discriminated against.
Kristine, can you supply a link or case law citations for what you referred to? I am curious to see the reasoning behind why a different source of income makes it possible for somebody to afford the unit. A real life example I had. Was inside a "for rent" house after a showing when my phone rings. People were just outside, and I was already there, so rather than asking a bunch of questions I just let them in to see the place. They wanted the place of course. Asking rent was $1200, turns out they had monthly income of $2000 after they talked a bit. Then they proceeded to try to figure if $800 was going to be enough to cover all other living expenses. No way IMO. Very similar to numbers you posted ...
EDIT - neglected to state that in my example people were not using a Section 8 voucher.
... if you have an income criteria in your standard criteria list such as 3 times the rent in verifiable income... I have yet to see a section 8 tenant that could qualify.
There has been case law where tenants prevailed on the rent multiplier requirement by Sec 8 landlords. The courts found that a Sec 8 tenant's rent used for such a requirement could be only that portion for which they were responsible. So if the total rent was $1200, and the voucher was for $900, the tenant portion was $300. If the requirement was 3 times rent, the tenant was considered qualified if they had $900 in income.
The source of income issue is real, especially here in the West. Get informed everyone.
No question that in some states LAWFUL source of income cannot be discriminated against.
Kristine, can you supply a link or case law citations for what you referred to? I am curious to see the reasoning behind why a different source of income makes it possible for somebody to afford the unit. A real life example I had. Was inside a "for rent" house after a showing when my phone rings. People were just outside, and I was already there, so rather than asking a bunch of questions I just let them in to see the place. They wanted the place of course. Asking rent was $1200, turns out they had monthly income of $2000 after they talked a bit. Then they proceeded to try to figure if $800 was going to be enough to cover all other living expenses. No way IMO. Very similar to numbers you posted ...
EDIT - neglected to state that in my example people were not using a Section 8 voucher.
My reading says that CT, MD and MA do not allow landlords to discriminate against applicants with S8 vouchers (or other types of public assistance). And that NJ requires landlords to accept S8 from tenants that are already in place but have newly become eligible. The links in this thread make it clear that OR is now on that list.
The rent multiplier argument was used in a CA case (I'm pretty sure) and I'll try to find it. To avoid discrimination, landlords are required to use the same application process for all applicants. I'm sure you'll agree that formulas and/or percentages can be a huge mistake when calculating many things, like living expenses. Or cash flow or capex. A family of 2 with rent of $1200 and $3600 is income is in a totally different world than a family with a voucher and $1200/mo in disposable income. But the case I read had the courts deciding that that S8 applicants could not be held to more than 3 times their portion of the rent. All that said, 3x rent is a sucky formula anyway for most low income persons, with or without a voucher. Food, medical, utilities and transportation don't cost less or more based on a rent amount (give or take a few differences in rural vs. urban locations). We have many BP landlords with units that rent under $600/mo. Depending on age, medical expenses and transportation needs, that $1800/mo is poverty level income for most.
May I expand on the 3x Rent criteria and Section 8. In my business I use the 3x rule always and I have low income housing studio apartments and I have nice SFR's that rent for $1500 and I use the 3x rent criteria on all of them. When I'm working with a Section 8 prospect I ask them how much their voucher is and include that as income. That would have been my argument in the CA case that you mentioned. Everyone has to be treated and screened equally and any Gov't support should be considered income just as some people choose to use child support as income. As long as it's verifiable!
And again I say... it really hasn't ever been an issue for me because I usually get the unit filled faster than a Section 8 prospect can get qualified and put up the money for move in.
I just googled: landlord fined for not taking section 8
And found several headlines from Mass and NY where landlords were fined.
It's unbelievable that the Federal Government can force a landlord to enter into a one side contract that is detrimental to the landlord, places him/her at a disadvantage of being able to enforce while adding an additional risk, burden of paperwork and accountability without remuneration. I have tried to rent to section 8 but they wanted me to accommodate their time frame and the he** with my time frame.
Why would I spend money having a lease approved by my Attorney and throw it in the trash to sign their one sided document?
I just googled: landlord fined for not taking section 8
And found several headlines from Mass and NY where landlords were fined.
It's unbelievable that the Federal Government can force a landlord to enter into a one side contract that is detrimental to the landlord, places him/her at a disadvantage of being able to enforce while adding an additional risk, burden of paperwork and accountability without remuneration. I have tried to rent to section 8 but they wanted me to accommodate their time frame and the he** with my time frame.
Why would I spend money having a lease approved by my Attorney and throw it in the trash to sign their one sided document?
The reason local rent control regs and S8 are even a thing is because we haven't found a way to house low income people, many of whom are working full time, without forcing private housing providers to do it. The reason that Fair Housing and HUD are a thing is because we haven't found a way to house people of color, of different national origins or even people with chlldren or disabilities without passing laws, again by forcing the private housing sector to do it.
S8 regs and Fair Housing exist because people don't play nice without the rules. Do you have any friends or family, that given a choice, wouldn't rent to a gay or transgender person, an unmarried couple, a single mother, a Muslim, a person with disability requiring a service animal, a person with only SSDI income? Landlords are not given a choice anymore, which is A-ok with me.
I just googled: landlord fined for not taking section 8
And found several headlines from Mass and NY where landlords were fined.
It's unbelievable that the Federal Government can force a landlord to enter into a one side contract that is detrimental to the landlord, places him/her at a disadvantage of being able to enforce while adding an additional risk, burden of paperwork and accountability without remuneration. I have tried to rent to section 8 but they wanted me to accommodate their time frame and the he** with my time frame.
Why would I spend money having a lease approved by my Attorney and throw it in the trash to sign their one sided document?
The reason local rent control regs and S8 are even a thing is because we haven't found a way to house low income people, many of whom are working full time, without forcing private housing providers to do it. The reason that Fair Housing and HUD are a thing is because we haven't found a way to house people of color, of different national origins or even people with chlldren or disabilities without passing laws, again by forcing the private housing sector to do it.
S8 regs and Fair Housing exist because people don't play nice without the rules. Do you have any friends or family, that given a choice, wouldn't rent to a gay or transgender person, an unmarried couple, a single mother, a Muslim, a person with disability requiring a service animal, a person with only SSDI income? Landlords are not given a choice anymore, which is A-ok with me.
This whole debate just illustrates the worst thing about BiggerPockets. Not the political disagreements; those are fine and healthy.
The fact that people very confidently give legal advice to people in other states. Because this is how it must be, 'cause 'Murica!
Ms. Poe is quite right that people need to become familiar with their own state's laws and regulations. I have seen people from places like Tennessee and Texas give advice to newbie landlords from places like Massachusetts and California that made me want to laugh through my tears.
You do not have to accept section 8 tenants but not because you do to want to, you are not allowed to discriminate against a tenant and reject them because they are section 8. However, if you are not approved for section 8 - then you cannot accept section 8 tenants. How do you solve the dilemma? What I do, as a Landlord, to get out of this conundrum is to simply state "Our house is not approved for Section 8 tenants." We are being honest and not discriminating. We cannot accept section 8 tenants simply because we have never went through the process to accept them.
You do not have to accept section 8 tenants but not because you do to want to, you are not allowed to discriminate against a tenant and reject them because they are section 8. However, if you are not approved for section 8 - then you cannot accept section 8 tenants. How do you solve the dilemma? What I do, as a Landlord, to get out of this conundrum is to simply state "Our house is not approved for Section 8 tenants." We are being honest and not discriminating. We cannot accept section 8 tenants simply because we have never went through the process to accept them.
Which, as I allude to in the post immediately above yours, may be perfectly legal in Ohio and not at all elsewhere.
Hi Richard, By saying you have not gone through the section 8 inspection process you are not saying you are not accepting section 8 tenants - there is no legalities here. You are simply stating that because you have not gone through the inspection process, that you are not equipped to accept a section 8 tenant. I would not give legal advice out of Ohio where I am licensed to practice and I did not give legal advice for Ohioans at that either :)
You do not have to accept section 8 tenants but not because you do to want to, you are not allowed to discriminate against a tenant and reject them because they are section 8. However, if you are not approved for section 8 - then you cannot accept section 8 tenants. How do you solve the dilemma? What I do, as a Landlord, to get out of this conundrum is to simply state "Our house is not approved for Section 8 tenants." We are being honest and not discriminating. We cannot accept section 8 tenants simply because we have never went through the process to accept them.
Which, as I allude to in the post immediately above yours, may be perfectly legal in Ohio and not at all elsewhere.
Ooops I just figured out how to this - new here:
Hi Richard, By saying that one has not gone through the section 8 inspection process that person is not saying they are rejecting section 8 tenants flat out simply because they are section 8 tenants - there are no legalities there. That person is simply stating that because they have not gone through the inspection process, that they are not equipped to accept a section 8 tenant. I would not give legal advice out of Ohio where I am licensed to practice and I did not give legal advice for Ohioans at that either :) In any case, that is what I do here in Ohio, and it is perfectly ok :)
From my limited experience with Section 8, and what the news article linked says, I believe like this: You may not advertise AGAINST Section 8, however I have found that finding other non-discriminatory reasons for not leasing to them are not hard to come by. Especially things like credit history, criminal backgrounds and/or debt-to-income, etc.
But others on here, I'm sure, have more and better things to say.
This is a perfect timing post for me. I am in the process of filling a vacancy at one of our rentals and I have someone with a Section 8 voucher. Even though I have informed her we are not currently qualified to accept Section 8 housing she still is wanting to fill out an application and show the place to her 'baby dad.' I don't want to flat out tell her no but I also don't want to waste my time showing the place and accepting an application when we aren't even Section 8 qualified and that is the only way she can afford the rent.
This whole debate just illustrates the worst thing about BiggerPockets. Not the political disagreements; those are fine and healthy.
The fact that people very confidently give legal advice to people in other states. Because this is how it must be, 'cause 'Murica!
Ms. Poe is quite right that people need to become familiar with their own state's laws and regulations. I have seen people from places like Tennessee and Texas give advice to newbie landlords from places like Massachusetts and California that made me want to laugh through my tears.
To be fair, buying and renting (and evicting) in CA gives one an education and alertness that you can't so easily get, say, in TN, Add to that some of our fabulous rent control munis (SF, Berkeley and LA), and I live in a different universe than almost all landlords in the South. That being said, I wouldn't trade CA for anything, except maybe WA or OR. If they fall into the ocean, I'll take NV.
Internet info is totally imperfect, but it doesn't take much to learn just a little bit about how it works elsewhere, Takes very little to read rulings and regs by the Feds. I'd say the most frustrating thing about BP is lack of curiosity and willingness.to think. But I find that to be true all over 'Murica.
From my limited experience with Section 8, and what the news article linked says, I believe like this: You may not advertise AGAINST Section 8, however I have found that finding other non-discriminatory reasons for not leasing to them are not hard to come by. Especially things like credit history, criminal backgrounds and/or debt-to-income, etc.
But others on here, I'm sure, have more and better things to say.
IMO, in some better areas in states where landlords must accept S8, it's going to get harder to disqualify applicants based on things like poor credit or criminal track records. There are so many educated young adults right now with good credit post college, good rental references, no criminal history, steady jobs, but low incomes that qualify them for things S8, especially those with children. They'll look perfect on a rental application. And they will know to sue if they think they have been discriminated against.
Good point. However, unless I'm missing something, this begs the question: Why wouldnt you want to accept Section 8?
I think the biggest complaint is paperwork and inspections. Some housing authorities really have it together. They give clear guidelines as to what to prepare for and show up when they say they will. They pay market rents, their payment system works and have a reasonable process for applying for a rent increase. And some HAs are a nightmare of unreturned calls and lost paperwork and problems managing their client's eligibility (tenants).
The truth is the inspections are totally basic health and safety stuff. But they are annoying. Some landlords will bulk at replacing a window pane just because of a tiny crack in the corner or repainting a peeling window sill. Some do not want an inspection. They just want to be left the hell alone. As you can imagine, many of those landlords have a tenant pool that accepts a landlord with that kind of attitude.
@Steve Babiak Here is a rundown by a CA law org about "source of income" discrimination in CA. It does not cite the case I remember reading, but does explain the rent multiplier as it relates to those receiving S8 vouchers the way we discussed.
http://www.lawfoundation.org/repository/Income.pdf
All CA landlords should read this. The legal opinions of this group may be just that, opinions. However, they are happy to take on cases of this kind of rental discrimination pro bono. At the very least it can help a landlord correctly word their advertising and application process.
Hi, Amanda this is a very active post but ultimately, please screen all your prospective tenants! Collect a 50 to 60 non refundable application fee and tell your prospective tenants that their application will be processed and reviewed. (YES, screen them if they have a voucher)
Go with one of the online services.- link below. Look at a credit report, criminal background, verify employment, and verify no recent previous evictions (you determine what is recent), get a 12 to 36 month rental history from their previous landlords, and make an informed decision regardless of their section 8 status.
Know who you are renting too. A tenant can get "kicked out" of the section 8 program, then what? Run your first rental like a business- because it is.
@Account Closed - having read the link you just provided, I can see where the one stated example from your earlier post came from. I found it odd that this link stated that the voucher amount is NOT a source of income! But I am still baffled a bit about the affordability as I gave in a real life example in my earlier post in this thread. This link you provided does not explain how that person with $900 per month of income can pay all living expenses; it just picks on a loophole in rental criteria where most would just state income of 3 times rent, by arguing the tenant's rent is just a fraction of the total amount the landlord is to receive. So now we have to stipulate an explicit dollar amount of income, not "3x rent and rent is $1200" - but rather "income must be $3600 minimum". And since the voucher amount doesn't count, the section 8 applicant has no chance of qualifying under that criteria - even though the landlord might have actually been willing to accept a section 8 applicant where income plus voucher was 3x rent. That starts to sound like unfair housing ... but it follows from the fair housing position on voucher and "rent".
I think more than the Section 8 Tenants being the boogyman it is the Government people worry about. Especially since it is localish government controlled. I have found local government types are worse than the feds or state because in the give a person a little power category.
I think the reason many landlords don't like S8 is because you are catering for a growing section of society that are the complete opposite of landlords.
On one side, the landlord is making prudent financial desicions, planning for the future, paying tax, etc. And then on the other side you have people gaming the system, contributing nothing to society other than huge numbers of fatherless children, getting paid to do practically nothing, and have an entitlement chip on their shoulder the size of Greenland.
We helped 2 of our S8 tenants get their voucher, we gave them lifts to the HA, we made sure their paperwork was perfect, we did everything to help them. They are nice people after all.
However, my wife was stuck in the HA waiting room one day and overheard a conversation between two sisters (one was there to support the other one) ; "you don't need to tell them how much you earn - none of their damn business to know your business - tell your boss that you need to put a lower amount on the income proof form".
As a landlord, I have no problems helping someone through the S8 program, but I do have a big problem when our tax money is given to someone who doesn't need it - and our house is used for that scam.
This is a gross generalization. None of our S8 tenants are as you characterize them to be. Our S8 tenants are retired veterans on fixed income, retired seniors on fixed income, and people with qualified disabilities on fixed income. All have contributed to society in the past and some are still contributing in a positive way today. We respect them and they respect us. With any benefit system there will be some people who game the system in an unethical way, but please don't assume all S8 people do.
Good point. However, unless I'm missing something, this begs the question: Why wouldnt you want to accept Section 8?
1. Some local housing authorities (who administer the S8 program) are easier to work with than others. If you are investing in an area that has a poorly run program, it could be daunting or costly or annoying or frustrating.
2. Some RE investors reject government involvement, even if it could benefit them in some way or provide more housing opportunities for the greater community.
3. Some RE investors don't like the concept of public benefit programs and subsidized housing, and/or the characteristics of some of the people these programs support.
For other investors, such as ourselves, we find partnering with our local housing authority beneficial to all parties involved and our community as a whole. We haven't experienced the frustration that some other RE investors have.
From my limited experience with Section 8, and what the news article linked says, I believe like this: You may not advertise AGAINST Section 8, however I have found that finding other non-discriminatory reasons for not leasing to them are not hard to come by. Especially things like credit history, criminal backgrounds and/or debt-to-income, etc.
But others on here, I'm sure, have more and better things to say.
IMO, in some better areas in states where landlords must accept S8, it's going to get harder to disqualify applicants based on things like poor credit or criminal track records. There are so many educated young adults right now with good credit post college, good rental references, no criminal history, steady jobs, but low incomes that qualify them for things S8, especially those with children. They'll look perfect on a rental application. And they will know to sue if they think they have been discriminated against.
If I really don't like someone, there's always a way to make then go elsewhere without denying them housing, this enticing them to reject your offer of housing.
charge higher rent
ask for a higher deposit
make fun of their car or clothes
be late for an appointment, continue to offer them appointments at weird times or locations
charge for applications and or showings
approve their application, but for a different property, not the nice one.
charge a move in fee
In general, it's okay to charge a higher rent/fees if you think the tenant is high risk. It's good business, and banks do the same thing with interest rates. They charge risky borrowers more. You can too. Sign a month to month lease and charge $300/mo extra. If they take it, then great. You're making extra. They'll probably decline and go elsewhere.
my point is that you can structure the rent in such a way that you could profitably accept nearly all applicants. Just know that you don't have to charge everyone the same price for everything.
I had a thought - and it hurt - LOL...
Would it be any easier to get rid of a problem Section 8 tenant, if you only used month-to-month agreements?
Do any Section 8 landlords know if this would work? I'm wondering if that might be a way to avoid Section 8 tenants, or to at least be able to evict them easier if they become a problem?
@Marcia Maynard do you know? Will the housing authorities only do leases?
It probably varies from one HA to another. Our local housing authority (Vancouver Housing Authority) requires us to start with a one-year lease and allows us to use month-to-month or longer term leases after that. The reasoning is that the housing authority invests quite a bit of time and resources to establish the tenant file and contract with the landlord. It is important to them for the tenant to have stability in housing and a one-year lease helps them achieve that goal.
There are requirements as to how often we can raise the rent (once in a 12 month period) and the notice period for changes to any term in the rental agreement is 60 days, instead of the minimum 30 days required by Washington state law. This is to accommodate the needs of the case managers in processing the changes. But we are allowed to use our own rental agreement, the same as we use for our other tenants. The agreement the VHA and the landlord enter into just becomes an addendum to our standard rental contract.
We have never had to evict a S8 tenant. The one time when a S8 tenant became non-compliant, we just contacted her case manager at the VHA and served the appropriate legal notices to the tenant, with a copy sent to the case manager. The case manager met with the tenant and guided her back on track. If the tenant is not conforming to the terms of the rental agreement, they can be evicted according to the landlord-tenant law for our jurisdiction, whether they are on a MTM contract or a longer term lease.
From my limited experience with Section 8, and what the news article linked says, I believe like this: You may not advertise AGAINST Section 8, however I have found that finding other non-discriminatory reasons for not leasing to them are not hard to come by. Especially things like credit history, criminal backgrounds and/or debt-to-income, etc.
But others on here, I'm sure, have more and better things to say.
IMO, in some better areas in states where landlords must accept S8, it's going to get harder to disqualify applicants based on things like poor credit or criminal track records. There are so many educated young adults right now with good credit post college, good rental references, no criminal history, steady jobs, but low incomes that qualify them for things S8, especially those with children. They'll look perfect on a rental application. And they will know to sue if they think they have been discriminated against.
If I really don't like someone, there's always a way to make then go elsewhere without denying them housing, this enticing them to reject your offer of housing.
charge higher rent
ask for a higher deposit
make fun of their car or clothes
be late for an appointment, continue to offer them appointments at weird times or locations
charge for applications and or showings
approve their application, but for a different property, not the nice one.
charge a move in fee
In general, it's okay to charge a higher rent/fees if you think the tenant is high risk. It's good business, and banks do the same thing with interest rates. They charge risky borrowers more. You can too. Sign a month to month lease and charge $300/mo extra. If they take it, then great. You're making extra. They'll probably decline and go elsewhere.
my point is that you can structure the rent in such a way that you could profitably accept nearly all applicants. Just know that you don't have to charge everyone the same price for everything.
Be careful. Some of the practices given in the quoted post could be considered discriminatory, and the "testers" used by fair housing groups would be able to demonstrate such.